Results of the April 2014 Ifo Business Survey

Ifo Business Climate Index Rises

The Ifo Business Climate Index for industry and trade in Germany rose in April to 111.2 points from 110.7 points last month. Assessments of the current business situation, which were already favourable, improved somewhat. Companies are also more confident about future business developments. Despite the crisis in Ukraine, the positive mood in the German economy prevails.

The business climate index in manufacturing rose to its highest level since July 2011. Although manufacturers fractionally scaled back their very good assessments of the current business situation, they were far more optimistic about their business outlook. The export prospects remain good. Capacity utilisation rose by almost one percentage point to 84.3%.

The business climate index in wholesaling also rose significantly. Assessments of the current business situation improved considerably and reached their highest level since spring 2012. Assessments of the short-term business outlook also continued to brighten. In retailing the business climate index edged downwards, although it remains at a high level. Retailers assessed their current business situation as less favourable. They were, however, slightly more optimistic about future business developments.

The business climate index in construction brightened marginally. Assessments of the current business situation were clearly more favourable than last month. The six-month business outlook, however, deteriorated for the third month in succession.<

Hans-Werner Sinn President of the Ifo Institute

Results of the Ifo Business Survey in Germany in all details (in German)

Summary of the Results

Results of the Ifo Business Survey (Summary) of April 2014: Positive Mood Prevails
| May 12, 2014
|
Information service
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Ifo Business Climate Germany (Index)

Business Situation and Expectations by Sector (Balances)

Ifo Business-Cycle Clock

Time series

Ifo Business Climate Germany (Index, 2005 = 100, seasonally adjusted)

04/13

05/13

06/13

07/13

08/13

09/13

10/13

11/13

12/13

01/14

02/14

03/14

04/14

Climate

104.2

105.7

105.9

106.1

107.6

107.8

107.5

109.4

109.5

110.6

111.3

110.7

111.2

Situation

107.1

110.0

109.4

110.0

112.0

111.4

111.3

112.3

111.6

112.4

114.4

115.2

115.3

Expectations

101.4

101.6

102.5

102.3

103.4

104.4

103.9

106.6

107.4

108.9

108.2

106.4

107.3

Source: Ifo Business Survey

Ifo Business Climate Germany (Balances, seasonally adjusted)

04/13

05/13

06/13

07/13

08/13

09/13

10/13

11/13

12/13

01/14

02/14

03/14

04/14

Trade and Industry

1.3

4.1

4.4

4.9

7.8

8.2

7.7

11.3

11.5

13.7

14.9

13.8

14.8

Manufacturing

3.2

6.1

7.8

7.8

11.2

12.1

11.2

15.4

15.6

17.7

19.8

19.1

20.2

Construction

2.3

1.2

1.1

-1.4

-4.0

-6.0

-5.9

-2.9

1.3

2.4

0.6

-3.5

-3.4

Wholesaling

-5.4

1.8

-0.8

-0.3

8.3

5.6

8.1

11.8

9.4

15.3

12.6

10.9

14.4

Retailing

-1.3

0.3

-1.7

2.9

3.1

6.4

3.6

5.3

4.8

4.3

8.4

8.5

7.7

Source: Ifo Business Survey

Explanatory note

The Ifo Business Climate Index is based on ca. 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing. The firms are asked to give their assessments of the current business situation and their expectations for the next six months. They can characterise their situation as “good”, “satisfactory” or “poor” and their business expectations for the next six months as “more favourable”, “unchanged” or “more unfavourable”. The balance value of the current business situation is the difference between the percentages of the responses “good” and “poor”, the balance value of the expectations is the difference between the percentages of the responses “more favourable” and “more unfavourable”. The business climate is a transformed mean of the balances of the business situation and the expectations. For the purpose of calculating the index values, the transformed balances are all normalized to the average of the year 2005.